Woman and man talking over drafting table

Apprenticeship and training funds have a long history of providing skilled workers for a number of industries. These funds are classified as employee welfare benefit plans under the Employee Retirement Income Security Act of 1974 (ERISA) and are typically exempt from federal income taxation under the Internal Revenue Code (IRC).

As a result, apprenticeship and training funds are subject to many of the same laws and requirements that apply to other multiemployer welfare plans. But because of their training and education function, it is important to know that these funds are subject to additional laws and requirements as well.

Woman and man talking over drafting table

A chapter in Trustee Handbook: A Guide to Labor-Management Employee Benefit Plans, Revised Eighth Edition, written by Richard T. Kennedy and Levi K. Logan and published by the International Foundation, provides an introduction to apprenticeship and training plans. Specifically, the chapter explores which laws and regulations apply to apprenticeship plans, who manages these plans, plan policies, tax exemption provisions, ERISA reporting and disclosure requirements, insurance needs and more.

Institute for Apprenticeship, Training and Education Programs

To illustrate, the excerpt below defines and articulates the specific contents of an apprenticeship agreement.

What Is an Apprenticeship Agreement?

DOL regulations also require an apprenticeship agreement. Generally, this is a written agreement between the program sponsor and the apprentice. The agreement sets forth the terms and conditions for the employment and training of the apprentice. The apprenticeship agreement is registered with the registration agency as evidence of the apprentice’s participation in the apprenticeship program.

DOL regulations specify the contents of the agreement. In addition to incorporating the standards of apprenticeship, the agreement must (among other things):

  • Identify the apprentice and the apprenticeship program
  • List the occupation in which the apprentice is to be trained
  • Specify the term of the apprenticeship program
  • State the graduated scale of wages to be paid
  • Include statements on the required cancellation provisions
  • Provide contact information for the party designated to receive and resolve complaints.

Apprenticeship agreements are prepared in conjunction with the standards of apprenticeship. DOL, state agencies, the international union or a national apprenticeship and training program can provide advice and assistance on preparation.

Trustee Handbook

This excerpt is from Chapter 25: Apprenticeship and Training Funds in the Trustee Handbook: A Guide to Labor-Management Employee Benefit Plans, Revised Eighth Edition. See detailed table of contents for the book.

The International Foundation offers many additional resources for your training and education fund. Visit out our Apprenticeship Resources web page for news, survey data, case studies and upcoming educational opportunities.

[Related Reading: Virtual Instruction Strategies for Apprenticeship Programs]

Justin Held, CEBS
Senior Research Analyst at the International Foundation 

Institute for Apprenticeship, Training and Education Programs

The latest from Word on Benefits:

Justin Held, CEBS

Senior Research Analyst at the International Foundation

Favorite Foundation Service: Foundation Research Surveys


Benefits Related Topics That Interest Him Most: Behavioral economics, socially responsible investing, apprenticeship training


Personal Insight: Justin loves everything baseball, visiting and checking off ballparks as he travels. In this free time, he enjoys hiking at national parks, cycling and reading about U.S. history.

Recommended Posts

The State of Multiemployer Health Plans: Ten Takeaways

Justin Held, CEBS

The median cost of benefits for multiemployer health plans increased 4.7% from 2017 to 2018, reaching $11,642 per participant per year (PPPY), according to a new International Foundation report. The consistent increases in costs over the ten-year period required increases in employer […]

Where We Are Now: Special Financial Assistance Under the American Rescue Plan Act

Kathy Bergstrom, CEBS

From capital market return expectations to the rules that cover the program, a lot has changed in the two years since the American Rescue Plan Act was signed into law and created the Special Financial Assistance (SFA) program for struggling multiemployer pension […]

Education Benefits for Recruiting and Building Talent

Anne Patterson

Could education benefits help your organization recruit and retain talent? Tune into the latest Talking Benefits episode to get “schooled” on the various options available to employers in this area. The episode covers: Give it a listen to find out how your […]